Do Your Homework: 5 Ways to Prep for a Meeting with a VC
Before you head into a meeting with a potential investor — even if it’s a simple getting-to-know-you session — the more prep work you do beforehand, the better position you’ll be in to make it count. Doing your homework means increasing the chances that you’ll establish a connection, make a memorable first impression, and get something out of every meeting you take. Here’s how I’d go about the prep work.
How to Prepare for a VC Meeting: 5 Tips
1) Research is Your Friend
Research whomever you’re meeting with—their background, history as investors, the type and size of investments they’ve made. If they’ve had successes, it’s helpful to know how a bit about those companies, and if there were exits, what those looked like and who they sold to or if the companies were brought public.
Their investment history doesn’t have to exactly match your company today but you really do want to be in the same ballpark (i.e. you are an enterprise SaaS business and the investor you are pitching primarily does consumer internet – probably good to know that there isn’t a great fit going into the meeting so that there aren’t any surprises).
2) Find a Connection
A common connection is always helpful. Investigate your wider network to see if you can get an introduction, but make sure it’s a real one. For these purposes, LinkedIn can be kind of dangerous. We all know that people connect with contacts they don’t really know (which basically nullifies the site’s purpose), but connections are only truly helpful if they’re legit and the connector can actually facilitate an introduction. So reach out but also dig in—how do they know each other? Can you identify any of the specifics on their relationship such as shared work history?
3) Understand the Firm’s Focus
By understanding a firm’s focus, you’ll get an idea of whether or not your business fits into their investing wheelhouse. But here’s the thing: even if you don’t fit smack-dab in their bull’s-eye, that doesn’t mean you should completely write them off. It’s completely acceptable to set up a casual meeting and say, “I know that right now I’m not quite what you’re looking for, we’re too early for you, etc. but I wanted to get on your radar and keep you in the loop as we continue to scale.”
You’re setting up expectations on both ends early on. You want to plant the seeds for a relationship so as your company grows, the relationship with the investor will develop, as well. Then, when your company is of a size they’d be interested in or the timing is right, they already know you and your business and have the privilege of watching you execute for a couple quarters or so.
4) Discover the Difference
Every VC firm is a little bit different (or sometimes a lot different) and picking up on those differences can really work in your favor.
A good place to start is by looking at a firm’s portfolio, past and present. Who’s there now, and who have they previously invested in? If you know someone who they’ve worked with, reach out and ask what makes the firm unique? Once you know how they’re different, you’ll be able to tailor your questions and get into specifics, which will both flatter them and help you get the quality info that you need.
5) Have an Objective
You should know what you want out of any meeting before you even step a foot in a conference room. Establish an objective. It can be as simple as agreeing to follow up every quarter. Or it might involve setting the scene for a full, formal pitch next time you meet. It may simply be figuring out what you would need to accomplish before you could move ahead with this investor.
Establishing a desired outcome for each meeting means you’ll never feel that your time was wasted and you’ll establish momentum—every step, even little ones, moves your company forward. I think a lot of entrepreneurs see meetings as pretty one-sided, as in the VC is holding all the cards and dictating the outcome. But that’s not true. Use this as an opportunity to gather feedback on your business, product, momentum and model. Challenge them to critique your business. Use what information they can provide you to make your business better, no matter your plans for raising capital from them.
Of course, you might not always get what you want out of a call or a meeting with a VC – sometimes you can feel like you just spent the entire questions answering questions but not getting anything of value out the of the meeting. I believe that if you prepare and do your homework, you can have much more positive and productive you need to make sure you are setting and hitting your objectives for the meeting.
In my opinion, you can never be too prepared, so it’s never a waste of time to do this kind of homework prior to a meeting. Even if you don’t use everything you’ve learned right away, you should keep it tucked away for later opportunities.
What other research do you do, or recommend doing, pre-meetings? How have you done it? Share your stories about making connections, setting objectives, and all of the above, in the comments.
It’s not an easy decision, but most important ones in life aren’t.